Posted by David Sherman on Saturday, November 03, 2007 at 02:29:52 :
In Reply to: Re: Oil Prices Approaching $100 bbl. posted by MoparNorm on Thursday, November 01, 2007 at 17:57:42 :
I don't know what you think about "peak oil", but it's pretty clear God quit making oil a long time ago but people keep using more and more, and the price isn't going down any time soon. It was easy to say "no drilling here" when gas was $.50/gal and the Arabs would sell us all the oil we wanted for $3/barrel. Once fuel gets real scarce, I think public opinion will change as far as oil drilling. But also, in the 40 years since all those places were closed to drilling, technology has improved immensely. They can do directional drilling to get to oil that's underneath environmentally sensitive areas, and they can just about guarantee that there will be no spills from any off-shore projects. One thing the high prices do is provide lots of money for innovation and for getting at oil that wasn't previously worth getting at.
The other thing that's going to happen is a revival of Fischer-Tropsch plants. The break-even point for them is around $50/barrel. Nobody wanted to invest in them when they figured oil would drop back to $20 by the time they came on line, but now $50 looks cheap. There are some pilot plants in the works already. There was an interesting article in the 8th AF news this month about bombing the German Fischer-Tropsch plants during WWII. My father, who participated, called them the "synthetic oil refineries". Germany had lots of coal, but their oil supplies had been embargoed, so they switched to making oil out of coal. It turns out that was also part of the reason for their push towards turbine powered aircraft. Apparently it's a lot harder to make aviation-grade gasoline out of coal than to make turbine fuel (kerosene, more or less). Fischer-Tropsch will get a lot of flak because of its CO2 emissions, but the two countries that have far and away the most coal reserves in the world are the US and China, and I doubt either one is going to willingly degenerate to 3rd-world status while sitting on mountains of potential fuel.
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